1. Field of the Invention
The present invention relates to methods of integrating the purchase of components from primary and secondary suppliers such that a purchaser can direct the shipping of components from the secondary supplier.
2. Background Art
As the size and complexity of manufactured articles increases, the complexity of efficient component purchasing systems for such articles increases. Manufactured items such as automobiles include numerous sub-systems each of which include a number of components. For example, automobiles include a powertrain system, sound systems, exhaust systems, environmental control systems, computer control systems, and the like. Moreover, market and governmental pressures require the constant design and redesign of these systems. Each system includes many discrete subcomponents that are purchased from suppliers.
Experience in the purchase of automobile components has shown that it is desirable to purchase parts from only a select few suppliers that are called Tier 1 suppliers. The advantages of dealing with such a reduced number of suppliers include a reduction in accounting expenses, improved component quality, and associated reduction in component expenses. The reduction in accounting expenses is the result of having to monitor and track the performance of a smaller number of suppliers. Improved quality is the result of suppliers competing for the coveted Tier 1 status and from the experience the supplier obtains over time in having such a status. Moreover, the reduction in component costs is a direct result in the competition and experience associated with Tier 1 status.
Notwithstanding the advantages in dealing with a reduced number of suppliers, there are associated problems. Complex manufactured components often include a large number of components. Moreover, a large manufacturing company may manufacture a number of articles each of which include a number of components. Accordingly, it is not always possible to obtain every part from the suppliers.
Manufacturing companies have used various methods to deal with the inadequacies in only purchasing from Tier 1 suppliers. Such methods have typically involved participation by the manufacturing company in the purchasing of parts from Tier 2 suppliers. Tier 2 suppliers are those suppliers from which Tier 1 suppliers purchase components. For example, a Tier 1 supplier might purchase a part from a Tier 2 supplier and store it until needed by the manufacturing company. Difficulties in such a purchasing situation may be traced to the inadequacy of many purchasing systems in dealing with goods originating from non-suppliers. Some systems attempt to deal with these instances by using phantom supplier codes. Although these fixes work to some extent, these systems are still inefficient and needlessly complex.
Accordingly, there is a need in the prior art for improved purchasing systems that directly integrate the sourcing process with both Tier 1 and Tier 2 suppliers.